LOS ANGELES (Reuters) - Ray Dalio, the billionaire founder of Bridgewater Associates, has defended his firm’s unconventional management style - based on employees openly challenging each other and giving themselves continuous performance feedback - saying it created a focus on “independent thinking.”

“It is a culture, but it’s the opposite of a cult,” Dalio said at a rare public speaking appearance at the Milken Institute Global Conference in Los Angeles on Monday.

The world’s largest hedge fund, with about $150 billion in assets under management, is known for what it calls a system of “radical transparency,” envisioned as a meritocracy of ideas where open challenge between employees is encouraged.

But Bridgewater is also known for relatively high turnover among its roughly 1,500-person Westport, Connecticut-based staff. An estimated 25 percent departs during the first 18 months of employment.

“It’s painful in the moment sometimes,” Dalio said in reference to employees giving each other near-constant feedback on personal strengths and weaknesses. “People are not used to those things.”

The hour-long, on-stage appearance came after Bridgewater received some negative attention in February over a reported schism between Dalio and a top deputy, Greg Jensen, over succession planning. Bridgewater at the time called the report an exaggeration of what occurred. Dalio did not address the topic on Monday.

Dalio, interviewed by Robert Kegan of the Harvard Graduate School of Education, noted how employees use iPads with proprietary “dot collector” software. Employees use the application to rate co-workers on 60 personal attributes, such as creativity and reliability. Employees also have a “believability” rating based on their expertise in a particular area.

Bridgewater records most of what happens internally, and workers are required to watch 15 minutes of video a day on what is going on inside the firm.

“By bringing it all to the surface, particularly disagreements to the surface, it’s very powerful,” Dalio said.

He said everyone at the firm participated in the feedback system, including him. “I need that challenge,” Dalio said. “I get literally thousands of negative dots all the time - and I reward people for that.”

Dalio, 66, said Bridgewater’s system was broadly applicable outside the firm. “I do believe that the greatest problem of mankind is the inability to take those opinions out of their heads and work them through in a more effective way.”